PSA may vow to keep Opel sites as chief tours for support

Bloomberg

PSA Group Chief Executive Officer Carlos Tavares will meet with government leaders in the UK and France this week to discuss the potential purchase of General Motors Co.’s Opel and Vauxhall brands.
Tavares will meet French Economy Minister Michel Sapin morning and UK Prime Minster Theresa May at a date that hasn’t yet been announced. To win support for the takeover, the maker of Peugeot and Citroen cars will pledge to maintain Opel’s independence, honor existing collective labor agreements and continue to invest in all four of its German sites until at least 2020, Bild am Sonntag reported.
British and German leaders are trying to prevent job cuts as PSA seeks to acquire GM’s European operation, thus giving it a bigger slice of a fiercely competitive market. Both PSA and GM are high-volume, low-margin manufacturers with production in countries with high labor costs and face challenges including tightening pollution standards.
GM and PSA are discussing a valuation for Opel of roughly $2 billion as the automakers push to reach an agreement as soon as the end of this week, people familiar with the matter said on Friday. The price tag would comprise about $1 billion in cash and the assumption of roughly $1 billion in liabilities, said the people, who asked not to be identified because the negotiations are private.
PSA shares, which have gained about 3 percent since news of the negotiations broke on Feb. 14, were little changed in Paris trading. No binding guarantees have been made so far to secure jobs or sites, Matthias Machnig, Germany’s deputy economy minister and the government’s liaison on the deal, said on ARD television on Monday. Still, there are “constructive signs,” he said.